The loan commitments to the country by the bilateral and multilateral lenders increased in December by $1,776 million, with the commitments standing at $2,298.67 million in the July-December period of the 2024-25 financial year.
In the July-November period of FY25, the Economic Relations Division had recorded $522.68 million in loan commitments.
Despite the increase in December, the loan commitments in the first half of FY25 is still more than three times less than what was pledged in the same period of FY24, according to the monthly ERD update released on Sunday.
The bilateral and multilateral lenders committed $6,989.89 million in the first half of FY24, just before flawed general elections won by Awami League before being ousted within eight months of the polls amid a mass uprising.
Economists said that the change in political regime was behind the low loan聽 commitments by the bilateral and multilateral lenders in the first half of FY25, as the lenders were waiting for positive signals from the new government for the continuation of loan deals.
鈥楾he resumption of loan operation during political transition takes time,鈥� said former World Bank Dhaka office chief economist Zahid Hussain.
The ERD update also showed that the disbursement of loans in the first six months of FY25 was lagging behind the amount released in the same period of FY24.
The country received $3,532.45 million in the July December period of FY25, compared with $4,063.67 million in the same period of FY24.
Thy loan repayment amount is, however, maintaining an upward trend, according to the ERD update.
The country paid back $1,982.78 million to the bilateral and multilateral creditors in the first half of the FY25, compared with $1,567.84 million in the same period of FY24.
Institute for Inclusive Finance and Development executive director Mustafa K Mujeri said that the repayment amount would continue to go up in the coming months.
This will happen because of amortisation of huge loans taken by the ousted AL regime, he said.
Between FY10 and FY23, the government鈥檚 outstanding foreign debts stood at $62.4 billion, marking a more than a threefold increase in 14 years.
In FY10, the government鈥檚 foreign debt was $20.33 billion.
The foreign loan spree has been attributed to costly projects such as Multi Lane Road Tunnel under the River Karnaphuli, Dhaka Mass Rapid Transit Development Project, Padma Bridge Rail Link Project, Dohazari-Cox鈥檚 Bazar Railway Track, Payra Deep Sea Port, Matarbari Ultra Super Critical Coal Fired Power Project, Maitree Super Thermal Power Project and Rooppur Nuclear Power Plant taken by the AL regime.
According to the recently released 鈥榳hite paper on the state of Bangladesh economy鈥�, the implementation of costly projects with foreign loans has left the country with concerns over the debt trap amid doubtful expected returns from the projects.
